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A comparative study of rough-cut cost estimations in a finite-capacity stochastic environment

Author

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  • Mark Eklin
  • Avraham Shtub
  • Yohanan Arzi

Abstract

In recent years, several researchers suggested cost estimation models that consider the limited capacity of the shop. In these studies, the stochastic nature of the shop floor is modelled by a time-consuming simulation. This article compares five alternative rough-cut cost estimation methods that can replace the simulation. The study compares the cost estimations derived from these methods. A cost estimation method, based on the forced idle time of the bottleneck workstation, was found to be outperform the others. As the best method, the bottleneck-based method was compared to the actual order's cost and was found to be a replacement to simulation.

Suggested Citation

  • Mark Eklin & Avraham Shtub & Yohanan Arzi, 2009. "A comparative study of rough-cut cost estimations in a finite-capacity stochastic environment," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 3(1), pages 1-36.
    • Handle: RePEc:ids:ijrevm:v:3:y:2009:i:1:p:1-36
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